Jimmy Chen, of Jimmy Chen CPA & Associates and Head of charitable foundation, charged with tax evasion

Saratoga: Head of charitable foundation charged with tax evasion

August 16, 2016

SARATOGA — A 62-year-old Saratoga man is facing criminal charges for allegedly using funds from his charitable foundation to pay for a luxury condominium in Taiwan and a life insurance policy for his wife, according to Santa Clara County prosecutors.

Jimmy Chen was arraigned Tuesday on six counts of felony tax evasion, said deputy district attorney Vonda Tracey. He faces up to six years and four months in state prison if convicted.

Tracey said a California Franchise Tax Board investigation revealed Chen set up the tax-exempt ChenSung Family Foundation in 2004 to provide scholarships to rural students in Taiwan.

Other than a single $250 contribution, funds that flowed into the organization from 2009 to 2011 were used by Chen to pay personal expenses, including the luxury condominium, which counted as amenities a karaoke room and an indoor golf range, Tracey said.

Chen avoided paying nearly $60,000 in state taxes by taking deductions on the funds and filing false tax returns, Tracey said.

“His actions are not fair to California residents that are paying what they owe and his actions are not fair to California residents who rely on those tax dollars,” Tracey said.

Chen’s attorney, Jonah Chew, did not immediately return a call for comment Tuesday.

The investigation also revealed the Saratoga resident gave seminars on charitable foundations and helped others set up organizations similar to his for a fee, according to prosecutors.

Chen, who is out of custody on $100,000 bail, is slated to return to court Sept. 23 to enter a plea, Tracey said.

Link to article:
http://www.mercurynews.com/2016/08/16/saratoga-head-of-charitable-foundation-charged-with-tax-evasion/

HEAD OF CHARITABLE FOUNDATION CHARGED WITH TAX EVASION

​For release on August 16, 2016

HEAD OF CHARITABLE FOUNDATION CHARGED WITH TAX EVASION

A South Bay accountant faces felony tax evasion charges for taking donation deductions from his charitable foundation that did not serve its purpose. The foundation was set up to grant scholarships to rural students in Taiwan.

According to a Franchise Tax Board investigation, Jimmy Chen, 62, of Saratoga, evaded close to $60,000 in state taxes by taking the deductions and filing false returns. He used the charitable foundation funds to pay personal expenses, including a luxury condo equipped with a karaoke room.

Chen faces six felony counts of tax fraud. If convicted, he may face up to six years and four months in state prison. Chen is scheduled to be arraigned today at 1:30 p.m. in Department 23 of the Hall of Justice in San Jose.

“Tax evasion undermines the fairness that is important in our community’’ prosecutor Vonda Tracey said. “The District Attorney’s Office proactively pursues these types of cases."

The investigation shows that Chen set up the tax-exempt ChenSung Family Foundation in 2004. Other than a single contribution of $250, ChenSung Family Foundation did not use its funds for any charitable purposes during the investigation period.

Instead, evidence shows that Chen spent the foundation funds on a luxury condo in Taiwan that advertised such amenities as an indoor golf range, premiums on a life insurance policy for his wife at the time, and other personal expenses.

Evidence further shows that Chen gave seminars on charitable foundations and helped others to set up the foundations similar to his for a fee. If anyone has further information they can contact Deputy District Attorney Vonda Tracey 408-792-2580.

Link to article:
https://www.sccgov.org/sites/da/newsroom/newsreleases/Pages/NRA2016/Chen-Tax-Evasion.aspx